https://en.wikipedia.org/wiki/Bitcoin
It's clear that the purpose of Bitcoin is to replace existing banking institutions by providing a trust-less alternative. This means that using an exchange to store Bitcoin is essentially useless. If your purpose is to protect your money by handing it over to a trusted institution, then you're better off putting it into a bank that's FDIC insured.
Of course, the real reason that people store their Bitcoin on Coinbase is so that they can easily profit from speculation by exchanging their coin for USD.